DryShips Inc. (NASDAQ:DRYS)
DryShips Inc. (NASDAQ:DRYS) is aggressively expanding its fleet even as it continues to face uncertainty in the market – on the back of growing concerns over its debt levels. The shipping company acquisition spree shows it is in top gear, having confirmed the acquisition of one 82,129 DWT Kamsarmax.
DryShips $24 Million Acquisition
DryShips Inc. (NASDAQ:DRYS) has confirmed the acquisition of the Kamsarmax Drybulk Carrier in a $24 million deal. Should everything goes as planned, the company expects to take delivery of the vessel in the second quarter of 2017.
“We are very excited to have started taking delivery of our previously announced acquisitions and also continue to grow our fleet with a new acquisition of one more modern vessel. The DryShips new era has official started and is expected to be accretive to our earnings and cash flows,” said Chief executive officer, George Economou.
Early in the year, DryShips Inc. (NASDAQ:DRYS) announced an $83.5 million deal for the acquisition of a Very Large Gas Carrier under construction at Hyundai. The investment spree comes at a time when the company is facing an uncertain future. Plunging shipping rates and too much debt have threatened to run the company to the ground.
DryShips Unending Problems
A push by the company to diversify its areas of operations also appears to have taken a hit. DryShips has struggled to achieve substantial growth looking while for opportunities on offshore oil drilling rigs as well as tankers and gas carriers. Its offshore drilling subsidiary filing for bankruptcy all but provides a clear picture of the mess that the company currently finds itself in.
Investors have already taken note of the company’s unending problems seen by the stock performance since the start of the year. The stock is currently down by nearly 100% having exploded by more than 2000% last year.
Given that the stock has shed almost its entire value, one would expect the company to start lowing on capital expenditures as a way of protecting its future. In a recent press release, the company announced plans to become debt free over the next four years. How successful the company will be on this front awaits to be seen – it is looking for ways to access bank debt financing for the first time since 2014.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.